Rapid Reading 006

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PROMOTION MATERIALS 2011RAPID READING EXERCISE PART:: 06

1. When the remission on stamp duty of a bill is available ? When a bill representsgenuine trade transaction, when the usance period of bill is not more than threemonths and when the bill is routed through banking channel

2. Endorsement is a signature of the maker or holder forthe purpose of negotiation

3. A Government promissory note is a negotiable instrument as per custom and usages

4. A cheque is drawn for Rs. 50000.00 and the payee endorses Rs. 5000.00 in favour ofMadhumita. Madhumita can claim from the bank - no amount because parallelendorsement is invalid

5. An undated cheque is not considered invalid or considered valid

6. The function of Central Processing Unit CPU is to read, interpret and process theinformation and instructions

7. On which one of the following securities, banker has a right of general lien securitiesremaining in his possession after the loan was adjusted

8. Certificate of incorporation provides conclusive proof that all the formalities

regarding the formation has been fulfilled by the promoters9. The following factors are to be examined while reviewing the Cash Credit Accounts

whether the borrower is passing the entire business to the bank; whetherprescribed margins are being maintained and whether there is an active turnoverboth in the account as well as in the stock offered as security

10. The following statements are true in respect of Allied agricultural advances Interest isto be charged on compounded half yearly basis in September/March each yearand no penal interest should be charged for loans upto Rs. 25000.00

11. Higher debtor turnover ratio means problems in collection of debts

12. Cash loss means net loss before charging depreciation

13. Nomination facility is available on deposit accounts opened by individuals

14. Crossing of of cheque denotes that it should be paid to banker only

15. Negotiable instruments act had permitted the following electronics cheques;truncated cheques; digital signatures and application of Information TechnologyAct

16. M/s Problem and company are maintaining a current account with your branch. Acheque for Rs. 25000.00 drawn by them is presented through clearing which is dulypassed and debited to their account. Subsequently, payment of the cheque iscountermanded by the drawer the same day before the time of return of clearingcheques. What decision will you take in this situation ? The drawer can stoppayment before the expiry of time for returning unpaid cheques as per clearinghouse rules

17. If a minor is admitted in a firm for the benefits of a partnership, the bank will open thecurrent account

18. On retirement of a partner, if the account is in credit balance the firm continues andthe branch must ensure that notices of retirement is obtained not only from thecontinuing partners but also from the retiring partners and then delete the retiringpartners name

19. While opening the account in the name of the Public Limited Company, the bank shouldobtain along with account opening form the memorandum and articles ofassociation; the board resolution to open the account with the bank and thecertificate of incorporation

PROMOTION MATERIALS BY A GAURI SANKAR

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20. A Hindu undivided family consists of all persons lineally descended from a commonancestor

21. When court issues garnishee order, the bank is known as garnishee

22. Raman and Joseph go to a shop. Raman says to the shop keeper Let Joseph havethe goods, and if he does not pay, I will pay Raman is liable only if Joseph fails topay

23. Purchase of plant and machinery uses of funds

24. Banking Ombudsman is appointed by RBI underBanking Regulation Act

25. The currency chest maintained by a nationalized bank is in the capacity of principaland agent

26. A and B maintain a fixed deposit account with a locker and want to make nomination forboth the accounts nomination can be made in both the accounts

27. Out of Sen award, Desai award, Shastri award and bipartite settlements, Sen award isnot applicable to award staff

28. According to Rule 5 of Official Language Rules reply of Hindi letters should begiven in Hindi only

29. As per limitation act, period of limitation for repayment of deposits by bank is three

years from demand30. Back to back letter of credit means issue of letter of credit in domestic currency on

the strength of foreign letter of credit

31. Which document will you call for in permitting removal of the contents of the locker incase of death of locker hirer who has not nominated anyone letter of administration

32. A term deposit receipt was originally issued in the name Amit and Bhawana.Subsequently, Amits name was deleted and Cumars name was added. Now, Bhawanahas requested to delete his name and include Divyas name. What would you do ? Not to accept as RBI directives prohibit such a change

33. Which account is not attachable by service of garnishee order ?- balance representingcheque sent in clearing, not yet cleared

34. The Credit Guarantee Fund scheme of SIDBI covers all fund based credit facilities

35. Country risk(s) is/are political, economic, social and cultural

36. Straight bill of lading is where goods specified in the bill of lading are consigned to anamed person

37. Dunkel draft was associated with Uruguay round

38. In our country, Exchange Control is under the purview of Ministry of Finance

39. TT buying rate is applied for an inward remittance when our Nostro account hasalready been credited

40. Import licence indicates CIF value of imports

41. Under FAS terms seller delivers the goods alongside the ship, buyer tonominate carrier, pay the freight and provide export clearance

42. If the letter of credit is silent about the revocability, the letter of credit is considered as

irrevocable43. In a balance sheet, the value of fixed assets Rs 1 lakhs, value of non current assets

Rs. 1 lakhs and value of total liabilities Rs 4 lakhs. What is the value of current assets? Rs. 2 lakhs

44. If current ratio of an organization is very high but acid test ratio is low, it indicates thatthe firm has very high stock level

45. Contingent liabilities are shown as footnote to the balance sheet


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46. If a company issues bonus shares, the net worth of the company will not undergoany change

47. If a company issues rights shares, the debt equity ratio will have a change byimprovement

48. Cyper law relates to law relating to electronic media and telecommunications

49. Nayak committee refers to advances made to small scale industry

50. The term loan instalments payable within twelve months is shown in the balance sheetas current liabilities

51. Raman purchased a draft favouring Krishnan, but has misplaced in his office..Krishnanapproached you for issue of a duplicate demand draft furnishing good sureties. Whatwould you do ? Duplicate draft will be issued only to Raman (the purchaser) andnot to Krishnan

52. What will you do in case any damaged/tampered parcel is received ? open deliveryof the parcel will be asked for

53. In the case of Hindu Undivided family, the following is not true In the case of jointfamily business every member born in the family becomes a coparcener in thefamily business

54. In the case of H U F, the following are considered true Joint Hindu family is notdissolved by the death of coparcener; in the joint family business only themanager of Karta has authority to incur debts; the karta alone can operate thecurrent account of Joint Hindu Family and any representative appointed by thekarta may also be permitted to operate the H U F account

55. Revenue stamp of what value is to be affixed in respect of receipt for for Rs. 500.00 ? Nil

56. Who can stop payment of a cheque ? the drawer

57. A cheque is drawn Pay Ramkumar without the words or order or bearer. Such aninstrument is transferable and negotiable by the payee

58. The reforms process in the financial sector in India was on the basis of NarasimhanCommittee recommendations

59. Which of the following are eligible for refinance from SIDBI ? All term loans and allworking capital advances under single window scheme

60. An attestation is required in respect of which of the following documents ? Mortgagedeed

61. Net working capital means current assets minus current liabilities

62. Securitisation is related to recycling of funds

63. For making payment of a fixed deposit of Rs. 5000.00 customers discharge shouldbe obtained on a revenue stamp of Rs.1.00

64. When can claim in respect of a fixed deposit receipt become time barred ? - the claimbecomes time barred three years after the date of presentation for payment bythat depositor

65.The following are not negotiable instruments a postal order; life insurance policy; ashare certificate; money order

66. Restrictive endorsement is one in which endorserrestricts the negotiability in future

67. A cheque may be ante-dated; post-dated and undated

68. Protection is available to the collecting banker under section 131 of the NegotiableInstruments Act, 1881 in respect of crossed cheques

69. When a cheque is crossed specially to more than one banker, the drawee bank can paythe amount of the cheque to the bank who is acting as agent for collection


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70. Section 31 of RBI act 1934 specifically prohibits issue of promissory notes, bills ofexchange and demand drafts (other than cheques on a banker) payable to bearer ondemand because these instruments are issued payable to bearer on demand willvirtually amount to currency notes and in India since issue of currency isconfined to RBI the central banker

71. Section 85(1) of the Negotiable Instruments Act, 1881 provides protection to the

paying banker in respect of forged endorsement

72. To open an account of a partnership firm, the firm need not be registered

73. On admission of a new partner in the firm with a credit balance, a new partnership letterhas to be obtained and operation to be allowed in the account as per the newmandate

74. A company is said to be registered when it gets certificate of incorporation from theregistrar of companies

75. A Co-parcenor is a minor male in the Hindu Family

76. When a Garnishee Nisi is served, the banker should stop operations in the judgmentdebtors account upto amount mentioned in the garnishee order and allow theoperations for balance amount

77. A loan sanctioned to a minor has been guaranteed by Zeeba. Minor fails to pay should forego the loan as minor is not competent to contract and the contractentered into with a minor is void

78. Registration of mortgage is compulsory- except mortgage by deposit by title deeds ifloan amount is Rs. 100.00 and more

79. A mortgage deed being executed is required to be attested by two persons

80. For execution of a decree, the following cannot be attached Personal ornaments,which as per religious usage cannot be parted with by any women; books ofaccounts; the wages of labourer and domestic servants and all monies payableunder the policy of insurance on the life of judgment debtor

81. Banking Ombudsman scheme is applicable to the business of all scheduledcommercial banks including Regional Rural Banks

82. The provisions available in the Securitisation and Reconstruction of Financial Assetsand Enforcement of Security Interest act, 2002 to form the Securitisation Co. NoSecuritisation Reconstruction Co shall commence business without taking registrationfrom Reserve Bank of India; Must have the owned funds of not less than two crorerupees; directors of Securitisation Co have adequate professional experience in mattersrelated to finance Securitisation and Reconstruction and that any of its directors hasnot been convicted of any offence involving moral turpitude

83. The reason for taking a letter of continuity in a cash credit or overdrart account is toprovide continuity to demand promissory note within the overall limitation period of threeyears and to make the document valid, irrespective of the account fluctuatingbetween debit and credit balances

84. A document executed for loan to a company must be executed with the companys

common seal; must be executed on behalf of the company; must be executed bythe authorized official

85. The stamp duty payable on an instrument will be at the rate prevailing at the placewhere the document is executed

86. The bank sanctioned a loan for Rs. 30 lakhs and for that mortgage deed was registeredwith the Registrar of assurances. The stamp duty on the mortgage deed is for fixedamount and advalorum

87. A foreign bank is one which has been incorporated outside India


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88. A bank maintains a trust account with Zutsi , a trustee and Yuman as beneficiary. Zutsiwants to make nomination in the account it cannot be allowed because it is notindividuals account

89. After the death of the accountholder bank is bound to inform the nominee if for sixmonths nominee does not turn-up in deposit account and if for three monthsnominee does not turn-up in case of locker account

90. Under which rule/act parliamentary committee on official language has been constituted Section 4 (1) of Official Language Act

91. A person informs you about loss of his fixed deposit receipt and requests you to issue aduplicate fixed deposit. How will you handle the request ? The bank will issueduplicate fixed deposit on the customers executing the banks standard stampedletter of indemnity. A letter intimating lost and request for issuing duplicate istaken. One or two acceptable sureties are also taken, each good for the amount

92. How is a foreign spouse of NRI treated for the purpose of opening an NRI account ? as a person of Indian origin

93. What are the strengths of a Self Help Group organization ? promotion of thrift andsavings; practitioner of mutual help; propagation of voluntarism and purveyor of

development of credit94. What are the weaknesses of a Self Help Organisation ? Super Profit orientation

95. Which rate will be applied while negotiating bills under letter of credit ? Bills buying

96. RBI has prohibited stapling of currency notes by a directive issued under Section 35Aof Banking Regulation act

97. Short Bill of lading - which does not contain printed memorandum on reverse ofdetaining the term and conditions of the contract of carriage

98. A person resident in India means a person who resided in India for a period of 182 daysduring the previous financial year

99. Overseas Banking Units can be established in Special Economic Zones100.A NRI wants premature encashment of FCNR before one year. The interest rate will bepaid as follows No interest is to be paid if the deposit has not run for minimum

prescribed period i.e. one year:::::::::::::::::::::::::::::


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